Contracts
Under the NC Offer to Purchase, 'earnest money' serves primarily as:
ACompensation for the listing broker
BEvidence of the buyer's good faith and financial ability to perform✓ Correct
CPayment for home inspections
DA non-refundable deposit regardless of circumstances
Explanation
Earnest money demonstrates the buyer's good faith and financial ability. It is held in trust and applied to the purchase price at closing, or returned/forfeited per contract terms.
People Also Study
Related North Carolina Questions
- Under the NC Offer to Purchase, the 'earnest money deposit' is held by:Contracts
- Under the North Carolina Offer to Purchase, the earnest money deposit (EMD) is:Contracts
- Under the NC Offer to Purchase, if a buyer terminates AFTER the due diligence period without a valid contractual reason, what happens to the earnest money deposit?Contracts
- Earnest money held in a broker's trust account in NC belongs to:Escrow & Title
- Under NC's standard Offer to Purchase, what happens if the property is substantially damaged by fire between contract acceptance and closing?Contracts
- In NC, when both buyer and seller refuse to release earnest money held in trust following a failed transaction, the broker's appropriate action is:Escrow & Title
- In North Carolina, trust account funds (earnest money) must be deposited within:Escrow & Title
- A real estate broker in North Carolina who receives earnest money must deposit it into a trust account within:Agency
Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
Study This Topic
Practice More North Carolina Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →